Review of Maritime Transport 2018 65

Home , Container port

In 2017, global port activity and cargo handling of containerized and bulk cargo expanded rapidly, following two years of weak performance. This expansion was in line with positive trends in the world economy and seaborne trade. Global container terminals boasted an increase in volume of about 6 per cent during the year, up from 2.1 per cent in 2016. World container port throughput stood at 752 million TEUs, reflecting an additional 42.3 million TEUs in 2017, an amount comparable to the port throughput of Shanghai, the world’s busiest port. While overall prospects for global port activity remain bright, preliminary figures point to decelerated growth in port volumes for 2018, as the growth impetus of 2017, marked by cyclical recovery and supply chain restocking factors, peters out. In addition, downside risks weighing on global shipping, such as trade policy risks, geopolitical factors and structural shifts in economies such as China, also portend a decline in port activity. Today’s port-operating landscape is characterized by heightened port competition, especially in the container market segment, where decisions by shipping alliances regarding capacity deployed, ports of call and network structure can determine the fate of a container port terminal. The framework is also being influenced by wide- PORTS ranging economic, policy and technological drivers of which digitalization is key. More than ever, ports and terminals around the world need to re-evaluate their role in global maritime logistics and prepare to embrace digitalization- driven innovations and technologies, which hold significant transformational potential. Strategic liner shipping alliances and vessel upsizing have made the relationship between container lines and ports more complex and triggered new dynamics, whereby shipping lines have stronger bargaining power and influence. The impact of liner market concentration and alliance deployment on the port–carrier relationship will need to be monitored and assessed. Areas of focus include the impact on the selection of ports of call, the configuration of liner shipping networks, the distribution of costs and benefits between container shipping and ports, and approaches to container terminal concessions, as shipping lines often have stakes in terminal operations. Enhancing port and terminal performance in all market segments is increasingly recognized as critical for port planning, investment and strategic positioning, as well as for meeting globally established sustainability benchmarks and objectives such as the Sustainable Development Goals. Ports and their stakeholders, including operators, users and Governments, should collaborate to identify and enable key levers for improving port productivity, profitability and operational efficiencies. PORTS IN 2017

World container port throughput:

+6% Volumes: 752 million TEUs

Asia Containerized vessels spend less time in ports.

Average port times for all WORLD CONTAINER ships improved in 2017 PORT VOLUMES BY REGION 31.2 Europe hours Developing North America America Africa 33.6 hours in 2016 Oceania

2% 4% 6% 8% 16% 63%

Digitalization will affect ports REVIEW OF MARITIME TRANSPORT 2018 65

estimated at over 15 billion tons in 2016, following A. OVERALL TRENDS IN GLOBAL PORTS an increase of 2.1 per cent over 2015 (Shanghai As key players in international trade and logistics International Shipping Institute, 2016). and critical nodes in global supply chains, seaports A study describing the performance of leading global continue to underpin globalized production processes, ports between 2011 and 2016 found that bulk- market access and effective integration in the global handling terminals captured most of the expansion economy. World seaports are principal infrastructural gains of all ports, including container- and bulk- assets that service shipping and trade, and their handling ports (Fairplay, 2017a). Almost all leading performance is largely determined by developments ports recorded a volume increase, except Shanghai, in the world economy and trade. Cargo-handling where the amount of cargo handled declined over activity and throughput in global ports, which reflected the review period. With 485 million tons handled a recovery in the global economy and a rebound in in 2016, Port Hedland, Australia saw rapid growth trade volumes that boosted shipping demand and during the same period, followed by the Chinese seaborne trade in 2017, showed overall improvement ports of Ningbo-Zhoushan, Caofeidian, Tangshan and promising trends. and Suzhou. The top 20 global ports included only three ports outside Asia: the ports of Hedland, Since over 80 per cent of world merchandise trade Rotterdam and South Louisiana. Compared with in volume terms is handled by ports worldwide and other ports on the list, cargo handled at the port nearly two thirds of this trade is loaded and unloaded of Rotterdam expanded at a slower rate between in the ports of developing countries, the strategic 2011 and 2016, owing to a relative decline in bulk importance of well-functioning and efficient ports for commodity volumes handled. Overall, and despite growth and development cannot be overemphasized. their predominance, port volumes in China are Global ports cater to ships and cargo across various said to be increasingly affected by the country’s stages of port-handling operations, starting with the gradual transition towards a more service- and shoreside, to the berth, the yard and the landside. consumption-oriented economy. In Singapore, port Therefore, enhancing port efficiency throughout the volumes between 2011 and 2016 increased, and various cargo- and vessel-handling phases is crucial the first liquefied natural gas bunkering terminal was for overall efficiency and to ensure that gains achieved opened in 2017. by one segment of the maritime logistics chain are not cancelled out by inefficiencies arising elsewhere Preliminary analysis suggests that port volumes in the process. increased in 2017 reflecting, to a large extent, global economic recovery and growth in seaborne trade Ports are at the intersection of many developments. (see chapter 1). Estimates indicate that volumes They benefited from a global recovery in 2017 that handled in the top 20 global ports increased by 5 per remains nevertheless fragile, owing to ongoing cent to 9.4 billion tons in 2017, compared with 8.9 downside risks. They also face challenges arising from billion tons in 2016 (Shanghai International Shipping the changing dynamics in the liner shipping market, Institute, 2017). the need to embrace technological advances brought about by digitalization, the requirement to comply with Table 4.1. provides a list of leading global ports, a heightened global sustainability agenda and the measured by total tons of all cargo handled. Among imperative of remaining competitive and responding the top 10 ports, 8 were in Asia, mainly from China. to the demands of the world economy and trade. Ningbo-Zhoushan ranked first, with total volumes handled surpassing the 1 billion ton mark for the first time. Aside from Tianjin, which saw an 8.4 per cent 1. Improvements in global port cargo drop in volumes, all ports on the list recorded volume throughput increases in 2017. Reduced volumes in Tianjin may A widely used indicator providing insights into reflect the delayed effect of the industrial accident that the functioning of ports and their ability to attract occurred in 2015 and involved two explosions in the business is volumes handled by ports. As cargo flows port’s storage and handling of hazardous materials are largely determined by changes in demand, port facilities. It may also reflect government restrictions volumes help take the pulse of the world economy on the use of tracks for the carriage of coal. With and inform about potential transport infrastructure regard to Shanghai, the continued rebalancing of the needs and investment requirements. As such, port Chinese economy towards domestic consumption cargo throughput, including all cargo types, can and services was a major factor in the port’s ranking. serve as a leading economic indicator. While data for Global port activity, which mirrored global economic global port throughput in 2017 was not available at recovery in 2017, improved across all regions, the time of writing, a look at data for 2016 indicates albeit with some variations. Existing data highlight the scale of overall port-handling activity. Cargo the positive performance of ports in Europe and throughput (all cargo types, including containerized the United States, with volumes handled increasing and bulk commodities) at world major ports was at an annual rate of 4.9 per cent and 7 per cent, 66 4. PORTS

Table 4.1 Global top 20 ports by cargo throughput, 2016–2017 (Million tons and annual percentage change) Rank Port Cargo throughput Percentage change 2017 2016 2017 2017–2016 1 Ningbo-Zhoushan 918 1 007 9,7 2 Shanghai 700 706 0,8 3 Singapore 593 626 5,5 4 Suzhou 574 608 5,9 5 Guangzhou 522 566 8,5 6 Tangshan 516 565 9,6 7 Qingdao 501 508 1,4 8 Port Hedland 485 505 4,3 9 Tianjin 549 503 -8,4 10 Rotterdam 461 467 1,3 11 Dalian 429 451 5,2 12 Busan 362 401 10,5 13 Yingkou 347 363 4,4 14 Rizhao 351 360 2,7 15 South Louisiana 295 308 4,4 16 Gwangyang 283 292 3,1 17 Yantai 265 286 7,6 18 Hong Kong SAR 257 282 9,7 19 Zhanjiang 255 282 10,3 20 Huanghua 245 270 10,0 Total 8 907 9 354 5,0

Source: Shanghai International Shipping Institute, 2017. Note: Figures cover all cargo types. Abbreviation: SAR, Special Administrative Region.

respectively. Reflecting Asia’s position as the main source performance measurement component (see box 4.1). of world shipping demand and the influence of China, This work culminated in the adoption of 26 indicators port volumes handled at Asian ports increased by 7.2 per across six areas: finance, human resources, gender, cent in 2017. Main ports in China handled 12.6 billion vessel operations, cargo operations and environment tons, an increase of 6.9 per cent over 2016. Ports in the (UNCTAD, 2016). The main objective was to provide Republic of Korea handled 1.57 billion tons, a 4.1 per members of the Programme’s port network with a useful cent improvement over 2016. Port volumes in Africa rose instrument that would benchmark performance and by 3.5 per cent, compared with 2016, reflecting overall carry out port and regional comparisons. Ports in the improved economic conditions, a recovery in commodity network involved in port performance measurement were export earnings and higher import demand in the region. landlord ports, full service ports, tool ports and mixed Volumes handled at major ports in Australia expanded at ports (figure 4.1). The port performance measurement the slow pace of 2.3 per cent in 2017, as port activity was system adopted under the Programme draws largely on affected by Hurricane Debbie. In particular, the hurricane the balance scorecard concept (table 4.2). undermined the performance of the port of Hay Point, the largest coal port in Australia. Results achieved between 2010 and 2017 are summarized in figures 4.2 to 4.6. When comparing port performance, the standard caveat is that ports 2. Tracking and measuring port are difficult to compare, with many context variables to performance consider. The scorecard describes the data profile for Global trade, supply chains, production processes and the 48 reporting ports since 2010 in terms of data set countries’ economic integration are heavily dependent metrics, port size, modal mix, governance, market and on efficient port systems and supporting logistics. It is regulatory structures. The indicators are sourced from therefore becoming increasingly important to monitor wide-ranging ports, 66 per cent of which have annual and measure the operational, financial, economic, social volumes below 10 million tons. and environmental performance of ports. Results presented in figures 4.2 to 4.6 reflect data In 2013, the Port Management Programme of the provided by the reporting countries and port entities UNCTAD Train for Trade Programme developed a port that are members of the network only. They should not REVIEW OF MARITIME TRANSPORT 2018 67

Figure 4.1 Port models of the Port Management be generalized or interpreted as reflecting all ports in the Programme port network, 2016 four regions defined under this scheme. Benchmarking (Share in percentage) has been developed for Asia, Africa, Europe and developing America. The global average is provided for all port networks of the Programme – French-, English-, Spanish- and Portuguese-speaking – reporting over a period of eight years and representing a total of 48 port M entities from 24 countries. 2 Profit levels can vary considerably between ports, depending on the accounting treatment, capital reward structure and profit definition used in the indicator. L Operating profit margins are considered the best level 2 T to make cross-country and time comparisons, given their composition. Therefore, the indicator is focused on the trading and management performance of the port entity. There are some outliers in the data, including a 12 loss-making entity for one period. However, over time, the mean value has remained robust, ranging between Source: UNCTAD, 2016. 35 per cent and 45 per cent.

Table 4.2 Port performance scorecard indicators Categories Port entity indicators Number values Mean in percentage (2010–2017) 1 EBITDA/revenue (operating margin) 126 39,30 2 Vessel dues/revenue 135 15,90 3 Cargo dues/revenue 120 34,20 Finance 4 Rents/revenue 117 10,10 5 Labour/revenue 106 24,80 6 Fees and the like/revenue 114 18,10 7 Tons per employee 134 54 854 8 Revenue per employee 128 $235 471 Human resources 9 EBITDA per employee 107 $119 711 10 Labour costs per employee 89 $42 515 11 Training costs/wages 101 1,30 12 Female participation rate, global 54 15,70 12,1 Female participation rate, management 53 30,90 12,2 Female participation rate, operations 39 12,30 Gender 12,3 Female participation rate, cargo handling 29 5,30 12,4 Female participation rate, other employees 8 32,00 Female participation rate, management plus 12,5 119 19,60 operations 13 Average waiting time 129 15 hours 14 Average gross tonnage per vessel 165 17 114 15,1 Oil tanker arrivals, average 28 10,80 15,2 Bulk carrier arrivals, average 28 11,20 Vessel operations 15,3 Container ship arrivals, average 28 40,30 15,4 Cruise ship arrivals, average 29 1,80 15,5 General cargo ship arrivals, average 28 16,50 15,6 Other ship arrivals, average 27 19,10 16 Average tonnage per arrival (all) 156 6 993 17 Tons per working hour, dry or solid bulk 91 402 18 Boxes per hour, containers 120 29 19 TEU dwell time, in days 73 6 Cargo operations 20 Tons per hour, liquid bulk 46 299 21 Tons per hectare (all) 130 131 553 22 Tons per berth metre (all) 143 4 257 23 Total passengers on ferries 18 811 744 24 Total passengers on cruise ships 20 89 929 25 Investment in environmental projects/total CAPEX 10 0,90 Environment 26 Environmental expenditures/revenue 17 0,30 Source: UNCTAD, 2016. Note: Number of values is a product of ports providing data for the variable by the number of years reporting. Abbreviations: CAPEX, capital expenditure; EBITDA, earnings before interest, taxes, depreciation and amortization. 68 4. PORTS

Figure 4.2 Financial indicators, 2010–2017 (Share in percentage)

0 EBITDA V C R L

G E L A A A

Source: UNCTAD, 2016. Abbreviation: EBITDA, earnings before interest, taxes, depreciation and amortization.

It is useful to consider port dues for cargo and an outlier characterized by a high average payroll vessels together. The regional differences are less for cost as a proportion of revenue. It remains unclear the gross port dues (cargo plus vessels) proportion whether this could be attributed to lower revenue of revenue. Total revenue when averaged across levels or higher staffing levels. The average wage is volumes suggests that just over $4 is earned by a estimated at $47,000, with a large range of values. port entity on each ton of cargo. It is a number that requires considerable nuance and comparison with local economic indicators that will Rent is a traditional source of independent income be examined in future port performance conferences. for ports. The clustering of the data in figure 4.2 is consistent with previous reporting. When Reflecting the growing importance of containerized contrasted with a concession or fee variable, it trade and the role of containers in multimodal varies significantly across the network. There is a transport, container ship arrivals represented shift towards concessions to the private sector but 36 per cent of all arrivals during the review period. thus far it has not necessarily implied a move away Given that 48 port entities located in 24 countries from leasing. It remains unclear whether this is due provided data entries in the system for almost all 26 indicators, data points are above 100. This enhances to concessions being added to a lease rather than the robustness of the statistical results, which can, replacing a lease. nevertheless, be further improved through additional Data in figure 4.3 are a significant addition to the port reporting. Work aimed at interpreting the results scorecard and chart the changing gender balance has been initiated, including the use of a five-year across port authorities in the data set. There is a moving average for analysis. There remains the clear distinction between categories of employees question, however, of how insights generated across traditional lines that has yet to reflect the from this work can be further leveraged to support technological shift in working methods and skill informed strategic planning and decisions relating to sets on the quays. The data suggest that Africa is ports. REVIEW OF MARITIME TRANSPORT 2018 69

Figure 4.3 Female participation rate, by area of activity, 2010–2017 (Percentage)

0 A A E L A G

C M O M O G Source: UNCTAD, 2016. Note: The female participation rate includes a five-year moving average.

Figure 4.4 Average arrivals by type of vessel, 2010–2017 (Share in percentage)

100

0 A A E L A G

O B C C G O Source: UNCTAD, 2016. 70 4. PORTS

Figure 4.5 Dry and liquid bulk cargo operations, 2010–2017 (Tons per working hour)

L A

0 200 00 00 00 1000 1200 100

L D Source: UNCTAD, 2016.

Figure 4.6 Training costs as a percentage of wages, 2010–2017

0 A A E L A G Source: UNCTAD, 2016. REVIEW OF MARITIME TRANSPORT 2018 71

Box 4.1 UNCTAD port performance scorecard indicators

Train for Trade is a component of the UNCTAD Port Management Programme, which supports port communities in developing countries seeking to ensure efficient and competitive port management, and in turn, support trade and economic development. The Programme creates port networks bringing together public, private and international entities. The aim is for port operators from public and private entities worldwide to share knowledge and expertise and to capitalize on research conducted in port management and port performance indicators (UNCTAD, 2016). For over 20 years, the Programme has provided training and capacity-building activities for four language networks (English, French, Portuguese and Spanish); 3,500 port managers from 49 countries in Africa, developing America, Asia, the Caribbean and Europe; and 110 replication cycles of one to two years at the national level. The Programme is recognized by beneficiaries, donors, partners and evaluators as a successful model of technical assistance. Under the activities of the Programme, UNCTAD has initiated work on port performance measurement. Starting in 2014, a series of international conferences brought together over 200 representatives from 30 member countries of the four language networks. The aim was to identify the port performance indicators that should be collected, the corresponding definitions, the underlying methodology and the technology to be adopted. The latter aims to ensure a common denominator across the various ports of the network of the Programme to promote meaningful comparisons. One of the challenges faced by the Programme was the ability to discriminate results at the port level instead of country level. This is often the case with indicators such as the logistics performance index (World Bank), the global competitiveness index (World Economic Forum) and the liner shipping connectivity index (UNCTAD). These indicators are aggregated at the country level and do not provide a port-level perspective. Additional information about the UNCTAD Port Management Programme and port performance scorecard is available at https://learn.unctad.org/course/index.php?categoryid=2. Source: UNCTAD, 2017a.

B. GLOBAL CONTAINER PORTS imports. However, the relatively rapid growth achieved by container ports after the weak performance of Container port throughput is driven to a large extent 2015 and 2106, suggests that apart from the cyclical by developments in the world economy and global recovery, some supply chain restocking may have further demand, including investment, production and supported growth in 2017. Trans-shipment declined consumption requirements. Trans-shipment is a major slightly from 26 per cent in 2016 to 25.8 per cent in area of container port activity that results in particular 2017. While the configuration of capacity along shipping from hub-and-spoke container networks and could networks has reached a level of stability, the expansion be enhanced by the further deployment of ultralarge of the Panama Canal could imply more direct calls to container vessels. Trends in 2016 and 2017 point to the the East Coast of the United States and probably slower strategic importance of containerized port activity. Some growth in trans-shipment activity in the Panama Canal 873 ports worldwide received regularly scheduled calls and Caribbean region. from fully cellular container ships across 141 countries, leading to over 560,000 individual port calls (Clarksons Table 4.3 World container port throughput by Research, 2017). region, 2016–2017 (20-foot equivalent units and annual 1. Increase in global container port percentage change) throughput Annual 2016 2017 percentage UNCTAD estimates that global container port throughput change rose by 6 per cent in 2017, three times the rate of 2016 Asia 454 513 516 484 176 997 6,5 (table 4.3). Increased port activity reflected the recovery Africa 30 406 398 32 078 811 5,5 of the world economy and the associated increase Europe 111 973 904 119 384 254 6,6 in trade flows. According to UNCTAD calculations, North America 54 796 654 56 524 056 3,2 752.2 million TEUs were handled by container ports Oceania 11 596 923 11 659 835 0,5 Developing in 2017. This total reflects the addition of some 42.3 46 405 001 48 355 369 4,2 America million TEUs, an amount comparable to total container World total 709 692 396 752 179 321 6,0 volumes handled by Shanghai, the top-ranked global port in volume terms. Source: UNCTAD secretariat calculations, based on data collected by various sources, including Lloyd’s List Intelligence, Jean-Paul Key factors contributing to higher volumes included Rodrigue, Hofstra University, Dynamar BV, Drewry Maritime Research and information posted on websites of port authorities strong growth on the intra-Asian trade route; improved and container port terminals. consumer demand in the United States and Europe; Note: Data are reported in the format available. In some cases, and an increase in North–South trade volumes, which country volumes were derived from secondary sources and reported growth rates. Country totals may conceal the fact that was supported by higher commodity export earnings minor ports may not be included. Therefore, data in the table may in Africa and developing America, thus stimulating differ from actual figures in some cases. 72 4. PORTS

Asia plays a central role in global trade and shipping, as terminals attracted 4.8 per cent more business in 2017. shown by activity in the container shipping sector. The A new container terminal in Jawaharlal Nehru Port, Asia–Pacific region accounts for over 42 per cent of the which has been running close to design capacity for number of ports and 60 per cent of the calls, with China several years, was opened in early 2018. representing 19 per cent of all calls alone (Clarksons Reflecting to a large extent the recovery in the European Research, 2017). These trends have been largely Union in 2017, volumes handled in European ports supported by globalization. The second most important increased by 6.6 per cent. With volumes reaching nearly player is Europe, which accounts for 28 per cent of world 120 million TEUs, Europe accounted for 16 per cent of container ports and 21 per cent of port calls. global container port throughput. In line with trends in port calls, Asia dominates the A development affecting European ports during the year container-handling business. The region continued to was the growing presence of the China Ocean Shipping account for nearly two thirds of the global container port Company as a principal port investor. After acquiring throughput (figure 4.7). Volumes handled in the region port facilities in Greece, Italy and Spain, the company increased by 6.5 per cent. Some 240 million TEUs were recorded in China, including Hong Kong, China and established a presence in Northern Europe by signing Taiwan Province of China. This represents almost half a concession agreement with Zeebrugge Port Authority of all port volumes handled in the region. Restrictions to open a container terminal – this was made possible imposed by the Government of China limiting imports in part by the Belt and Road Initiative. The company is of some waste material on the backhaul journeys from expected to emerge as a world leader among terminal North America and Europe are likely to increase the operators by 2020 (Wei, 2018). incidence of empties in the overall traffic handled by North America maintained an 8 per cent share of total ports, which could exacerbate the trade and freight rate container port volumes, supported by strong activity in imbalances on the trans-Pacific route. the United States. Africa’s share of world container port Elsewhere in Asia, container port throughput in 2017 throughput was estimated at 4 per cent, surpassing was influenced by developments in the Islamic Republic Oceania’s 2 per cent share. However, this was still below of Iran and sanctions imposed on Qatar. While volumes the 6 per cent accounted for by developing American in Bandar Abbas port increased by over 20 per cent, ports. Volumes in Africa increased due to stronger the imposition of sanctions on the Islamic Republic of import demand. Many sub-Saharan African countries Iran had already started to weigh on port performance experienced a higher demand for their exports and in late 2017 (Drewry Maritime Research, 2018a). Jebel recorded better export earnings than in the past. This in Ali faced some competition from Bandar Abbas port, turn boosted imports, with the southbound Asia–West despite increasing volumes by 4 per cent over 2016. Africa trade growing at its fastest rate since 2014 (Drewry Port Sohar in Oman gained the most from sanctions Maritime Research, 2017a). This is reflected in increased imposed on Qatar. Growth in South Asia surpassed throughputs in South Africa and Western Africa, in 10.7 per cent, reflecting among other factors, the contrast with losses incurred in 2016. In particular, growing shift of manufacturing towards Bangladesh, the recovery in Angola and Nigeria from a low-price India and Pakistan. In India, Jawaharlal Nehru Port environment and the robust economies of Côte d’Ivoire and Ghana contributed favourably to a 9.5 per cent increase in West African ports’ container throughput. Figure 4.7 World container port throughput by region, 2017 In Australia and New Zealand, growth in container port (Percentage share in total 20-foot volumes was sustained by external demand and strong equivalent units) consumer spending, while in developing America, volumes were driven by the higher commodity prices O environment and the end of recession in key economies 2 A such as in Brazil. Container traffic from Asia to the D A East Coast of South America bounced back in 2017, N A expanding by 15.5 per cent. The recovery was driven by Brazilian imports, which rose sharply, by 22 per cent. A As shown in table 4.4, container port activity tends to be concentrated in major ports. These are generally mega

E ports, which serve as hubs or gateways for important 1 hinterlands (Clarksons Research, 2017). The combined throughput at the world’s leading 20 container terminals increased by 5.9 per cent. Together, they handled an estimated 336.6 million TEUs, accounting for 45 per cent of the world’s total. Except for the ports of Klang and Kaohsiung, all ports in the ranking recorded Source: UNCTAD secretariat calculations, derived from table 4.3. volume gains. The contribution of Asian container ports REVIEW OF MARITIME TRANSPORT 2018 73

Table 4.4 Leading 20 global container ports, 2017 (Thousand 20-foot equivalent units, percentage annual change and rank) Percentage change Port Economy Throughput 2017 Throughput 2016 Rank 2017 2016–2017 Shanghai China 40 230 37 133 8,3 1 Singapore Singapore 33 670 30 904 9,0 2 Shenzhen China 25 210 23 979 5,1 3 Ningbo-Zhoushan China 24 610 21 560 14,1 4 Busan Republic of Korea 21 400 19 850 7,8 5 Hong Kong Hong Kong SAR 20 760 19 813 4,8 6 Guangzhou (Nansha) China 20 370 18 858 8,0 7 Qingdao China 18 260 18 010 1,4 8 Dubai United Arab Emirates 15 440 14 772 4,5 9 Tianjin China 15 210 14 490 5,0 10 Rotterdam Netherlands 13 600 12 385 9,8 11 Port Klang Malaysia 12 060 13 170 -8,4 12 Antwerp Belgium 10 450 10 037 4,1 13 Xiamen China 10 380 9 614 8,0 14 Kaohsiung Taiwan Province of China 10 240 10 465 -2,2 15 Dalian China 9 710 9 614 1,0 16 Los Angeles United States 9 340 8 857 5,5 17 Hamburg Germany 9 600 8 910 7,7 18 Tanjung Pelepas Malaysia 8 330 8 281 0,6 19 Laem Chabang Thailand 7 760 7 227 7,4 20 Total 336 630 317 929 5,9

Source: UNCTAD secretariat calculations, based on various industry sources. Abbreviation: SAR, Special Administrative Region. surpasses all other regions, as 80 per cent of the ports new dynamics where shipping lines have greater featuring in the top 20 are Asian. Nearly two thirds of bargaining power and influence. these are in China. Vessel size increases and the rise of mega alliances Apart from the contraction in volumes experienced have heightened the requirements for ports to adapt by the ports of Klang and Kaohsiung, growth of and respond to more stringent requirements. Bigger call individual ports varied between a low of 0.6 per cent sizes exert additional pressure on ports and terminals in Tanjung Pelepas and 14.1 per cent in Ningbo- and require an effective response measure to ensure Zhoushan. Shanghai remained the busiest container that space, equipment, labour, technology and port port worldwide; volumes handled expanded by 8.3 per services are optimized. This raises the question of cent, bringing the total volume to 40.2 million TEUs. whether costs and benefits associated with the upsizing Singapore ranked second, handling 33.7 million TEUs, of vessels and alliances are fairly distributed between a 9 per cent increase over 2016. In third position, the shipping lines and ports. amount of volumes handled by Shenzhen increased Liner shipping consolidation, alliance formation and the by 5.1 per cent, to 25.2 million TEUs. Ranked fourth, deployment of larger vessels have combined, leading to Ningbo-Zhoushan saw the largest increase in volumes, greater competition among container ports to win port which rose by 14.1 per cent to 24.6 million TEUs. As calls (Notteboom et al., 2017). For example, the port of the biggest receiver of plastic waste, Guangzhou, and Klang handled less cargo during the year, as alliance to some extent, Shenzhen, which imports wastepaper, members limited their port calls. Meanwhile, the ports are likely to be affected by a new regulation introduced of Singapore and Tanjung Pelepas recorded an increase in China in late 2017, limiting the imports of some types of 8.2 per cent and 3.4 per cent, respectively, following of wastes (Drewry Maritime Research, 2017a). Outside the decision by shipping alliance members to use them Asia, four ports, Rotterdam, Antwerp, Los Angeles and as pivotal ports of call (Shanghai International Shipping Hamburg, are among the top 20 ports. All four handled Institute, 2017). larger volumes in 2017, although Rotterdam saw the largest increase, as cargo throughput expanded by As ports compete for fewer services by larger vessels, nearly 10 per cent, above levels in 2016. ports and terminals are interacting with carriers that have strong negotiating and decision-making power. The 2. Operational performance of world stakes are high for terminal operators, as a call made container ports by alliance members using larger vessels can generate significant port volumes and business. For example, Strategic liner shipping alliances and the associated a weekly call concerning one of the services between trend of vessel upsizing have added complexity to the Northern Europe and the Far East is estimated to result container shipping and port relationship and triggered in annual container volumes of about 300,000 TEUs 74 4. PORTS

per port of call. A liner service using ships with only a Global port productivity fell in 2017, indicating that capacity of 20,000 TEUs could increase this estimate to container terminals were challenged by the deployment an average of about 450,000 TEUs per year per port of of larger vessels and the growth in port call sizes. In call (Notteboom et al., 2017). this context, port productivity refers to the number of container moves per hour of time spent by vessels in The dynamics between shipping lines and container port, weighted by the call size, which is significantly port terminals is further shaped by the ability of lines impacted by the number of cranes deployed to service to take part in port operations though shareholdings a ship. Bearing these considerations in mind, some and joint ventures with terminal operators, sister estimates for 2017 indicate a 3 per cent average drop companies or subsidiaries involved in terminal in weighted port productivity globally, compared with operations. This can affect approaches to terminal 2016 (JOC.com, 2018). concessions. Although a terminal operator owned by a shipping line may have a more stable cargo base, The decline in port productivity affected all regions. One regulators may prefer that concessions be granted of the steepest declines was experienced in Africa, where to independent operators to allow access to all port- port productivity dipped by 12 per cent. Productivity fell handling service providers. by more than 7 per cent in developing America, Western Asia and Indian ports. The impact on European and North Some of these concerns, including the operational American ports was less pronounced, with reductions of challenges arising from the growing use of mega 3 per cent in the number of container moves per hour ships and formation of mega alliances, are reflected spent by vessels in time at berth. South-East Asia was in port productivity and performance patterns. While the only region where some port productivity gains were liner shipping networks seem to have benefited from achieved, despite an increase in call sizes. In terms of efficiencies arising from consolidation and alliance individual ports, the greatest declines in port productivity restructuring, gains at the port level have not evolved were seen in Manila (21 per cent), and in Dalian and Laem at the same pace. Container berth productivity is Chabang, where productivity declined by 16 per cent. constrained by the growing volume of boxes exchanged On the other hand, some ports such as Long Beach, in vessel calls during peak hours (Fairplay, 2018). The California and Chiwan, China recorded an increase in deployment of larger vessels and alliance network productivity. design have direct implications for the number of boxes exchanged per call, which in turn, exerts additional Interestingly, both the number of moves per total hours pressure on ports’ handling capacities. spent by vessels in port and the waiting time between arrival and the allocation of berth decreased, the latter Existing data for 2017 indicate an annual global increase by 6 per cent worldwide (JOC.com, 2018). The world’s of 9 per cent in the number of containers handled per largest ports recorded a reduction in the port-to- call. Northern European ports experienced the largest berth time; the largest improvements were witnessed growth – 20 per cent – in average call sizes, compared in the ports of Antwerp and Hamburg. Less positive with 2016. In comparison, call sizes at ports in South- performances were recorded elsewhere. For example, East Asia and developing America increased by 11 per berth-waiting times more than doubled in Manila and cent in each region. Elsewhere, results were less increased almost by half in the port of Shekou. Increases positive, showing no growth (Africa) or modest declines in port-to-berth waiting times were also recorded in (Oceania). With regard to results in individual container India and some African countries. ports and terminals, the largest increases in call sizes were seen in Antwerp (29 per cent), Yangshan (27 per The performance of major trans-shipment hubs was cent) and Manila (22 per cent) (Fairplay, 2018). reported to be relatively even among the various ports. The average port-to-berth waiting time in Jebel Ali was The need to handle more containers at the same time estimated at 2.7 hours, while in Hong Kong (China), exerts pressure on berth and yard operations. While Busan and Singapore, waiting times averaged about 2.4 the increased demand for cargo-handling operations hours. The competitiveness of ports such as Tanjung can be mitigated to some extent through the container Pelepas and Klang could be observed with waiting distribution in ship-planning processes, larger call sizes, times of 2.2 hours and 2.4 hours, respectively. The combined with a limited number of cranes, reduces average waiting time at Tanjung Priok, which attracted optimal crane intensity. The gap between growth in call mainline calls in 2017, was also 2.4 hours. size and productivity widens when the number of boxes exchanged exceeds 4,000 (Fairplay, 2017b). Some Table 4.5 shows the average time in port by vessel type observers contend that ports perform best when ship at the global level. In 2017, the average time in port for sizes are within the range of 4,000–14,000 TEUs. These all ships was estimated at 31.2 hours, an improvement sizes are optimal for quayside performance, although over the previous year when ships stayed an average they allow for fewer rows of containers than larger of 33.6 hours in ports. Containerized vessels tend to ships. Performance of ships with a capacity of more spend less time in ports, followed by dry cargo ships, than 14,000 TEUs is negatively affected by the pressure gas carriers and tankers. Bulk carriers experience the on equipment and space, for example spreaders, trolley longest time in port, about 65 hours on average, more distances, berth and yard areas. than double the global average for all ships. REVIEW OF MARITIME TRANSPORT 2018 75

Table 4.5 Average time in port, world, 2016 and 2017 Total deadweight tonnage Days in port Total arrivals (thousands of tons) Vessel type 2016 2017 2017 2017 Container ships 0,87 0,92 447 626 18 894 342 Tankers 1,36 1,30 301 713 9 648 282 Gas carriers 1,05 1,10 64 603 890 880 Bulk carriers 2,72 2,68 236 407 13 152 509 Dry cargo and passenger ships 1,10 1,02 3 995 242 7 280 933 Total 1,37 1,31 5 045 591 49 866 946 Source: Data provided by Marine Traffic, 2018. Notes: Averages refer to medians. Time in port is defined as the difference between the time that the ship enters the port limits (excluding anchorages) and the time that the ship exits those limits. Irrespective of whether the ship’s visit is related to cargo operations or other types of operations such as bunkering, repair, maintenance, storage and idling, time in port includes the time prior to berthing, the time spent at berth (dwell and working times) and the time spent undocking and transiting out of port limits.

Aside from typical operational and service level 250,000 TEUs per crane per year, and more than indicators, such as crane moves per hour and berth 50,000 TEUs per hectare per year (Drewry Maritime allocation waiting time, port performance can also Research, 2017b). be assessed according to the intensity of port asset Overall, the deployment of larger container ships in utilization. Quay lines, cranes and land are important recent years seems to have had little impact on the and expensive assets, for which the level of utilization annual use of quay line assets and on TEUs handled is a key performance indicator, especially for investors. per gantry crane, whose levels generally stood at some As gantry crane expenditure hovers around $10 million 127,000 TEUs per crane a year. Land use intensity per crane and quay construction can cost as much as declined slightly, averaging close to 27,000 TEUs per $100,000 per metre – the greater the utilization levels, hectare per year in 2016. This may reflect the impact the higher the performance of these assets (Drewry of the growing size of ships calling at ports and the Maritime Research, 2017b). associated pressure on yard operations during periods Table 4.6 features relevant industry benchmarks and of peak volumes. design parameters generally used to measure intensity An increase in yard space to alleviate pressure can have usage of assets and performance. Table 4.7 reviews the effect of reducing intensity usage. However, other the asset use intensity between 2013 and 2016. It factors may also affect land usage, as shown in North shows that asset use intensity remained unchanged America, where a shift from chassis operations towards overall, although land use intensity decreased. On a fully rounded yard systems improved port performance global basis, the intensity of quay line usage typically (Drewry Maritime Research, 2017b). Similarly, ports in achieved by terminals worldwide is estimated at developing America improved land usage by increasingly 1,100 TEUs per metre per year. As shown in table 4.6, moving away from small multi-purpose terminals in many the actual performance in 2016 was about 1,150 TEUs locations towards larger, specialized container terminals. per metre, an intensity usage below the theoretical A terminal’s size can also influence usage performance, design parameter of 1,500 TEUs per metre. That said, as illustrated by the relatively higher performance performance varied at some terminals, especially in observed in Asia. A terminal’s function also has a role Asia, where it was relatively better than typical industry to play, with trans-shipment ports generally performing performance. Quay line performance above 2,000 TEUs at higher levels than gateway ports. Operational factors per metre per year were observed in the ports of Busan; such as cargo-handling equipment and working hours Singapore; Shanghai; Ningbo-Zhoushan; Hong Kong, tend to have a strong impact on asset usage indicators China; Klang; Laerm Chabang; and Jawaharlal Nehru such as TEUs handled per hectare, per metre of quay Port Terminal. Many of these also reached more than line and per crane.

Table 4.6 Usage intensity of world container terminal assets, 2016 Typical industry Measure per annum Performance Remarks design parameters Design parameters typically range from 800–1700 TEUs per metre TEUs per metre of quay 1 500 1 154 per year TEUs per ship to shore gantry Design parameters are influenced by ratio of number 200 000 127 167 crane of boxes to TEUs Design parameters are highly dependent on yard TEUs per hectare 40 000 26 366 equipment type and dwell times

Source: Drewry Maritime Research, 2017b. Note: Figures on actual performance are based on a sample of 321 terminals handling over 200,000 TEUs per annum. 76 4. PORTS

Table 4.7 Usage intensity of world container terminal assets by region, 2003 and 2016

Region 2003 2016 Percentage change

Developing America TEUs per metre of quay per annum 665 849 27,7 TEUs per ship to shore gantry crane per 105 517 110 307 4,53 annum TEUs per hectare per annum 16 696 27 752 66,2 Europe TEUs per metre of quay per annum 653 761 16,53 TEUs per ship to shore gantry crane per 100 110 94 819 -5,28 annum TEUs per hectare per annum 16 651 18 794 12,87 North America TEUs per metre of quay per annum 665 777 16,8 TEUs per ship to shore gantry crane per 90 661 91 885 1,4 annum TEUs per hectare per annum 9 604 14 407 50,0 Source: Drewry Maritime Research, 2017b. Note: Figures on actual performance are based on a sample of 321 terminals handling over 200,000 TEUs per annum.

Dry bulk throughput at major world ports showed C. GLOBAL DRY BULK TERMINALS divergent growth. Throughput at Qinhuangdao, reflecting China’s importance as the main market for iron 1. Global dry bulk terminals benefit ore, grew by 46 per cent between 2016 and 2017. Dry from growing demand for raw bulk throughput at major ports in Australia, notably at materials and energy Port Hedland – the country’s largest export facility and the world’s largest iron ore loading terminal (Business Positive trends in population growth, urbanization, Insider Australia, 2017) – continued to increase with an infrastructure development, construction activity, annual growth rate of 5.5 per cent. Three major global and industrial and steel output, especially in rapidly mining companies (Broken Hill Proprietary Billiton, emerging developing countries in Asia, have Hancock Prospecting and Fortescue Metals Group) generally had a marked impact on bulk terminals are using the port. Rio Tinto, however, is using another worldwide. Dry bulk commodities have been the port (Port Dampier) (Market Realist, 2018). In Singapore, mainstay of international seaborne trade volumes growth in volumes remained stable. While overall cargo in recent years, accounting for almost half of world volumes handled have grown steadily over the past few seaborne trade flows in 2017. years, the port is said to be increasingly focused on trade in liquefied natural gas (Fairplay, 2017a). Rotterdam, the Trends in coal trade volumes in 2017 were shaped biggest and busiest port in Europe, recorded a slight by growing environmental sustainability imperatives. decrease in throughput, reflecting reduced demand for Many countries continued their energy transition European coal imports. towards less carbon-intensive, cleaner sources of energy, thereby lessening the demand for coal. While this may be true in terms of coal imports 2. Performance of selected global dry received in Europe, coal remained a major source bulk terminals of energy in many developing countries and a key Being able to monitor and assess the performance of export commodity for countries such as Australia, bulk terminals, including dry bulk terminals, is important Colombia and Indonesia. For countries in South- for planning, investment, safety, productivity and East Asia, notably Indonesia, the Republic of Korea service quality. To this end, the Baltic and International and Viet Nam, coal remained a key cargo import. Maritime Council (BIMCO) launched a vetting system of China remained the leading source of global import dry bulk terminals around the world in 2015 (BIMCO, demand for iron ore, (see chapter 1). With regard 2017). Relying upon reports by shipowners about their to exports, Australia and Brazil remained the main ships’ visits to dry bulk terminals at the global level, players. Table 4.8 features some major dry bulk the vetting scheme is considered useful in gathering terminals and highlights the central role of countries information about terminal performance and highlighting such as Australia, China, Indonesia, the Russian areas that require further monitoring and improvement. Federation and the United States, as well as Northern Data collected between 2015 and 2017 focused on European countries as main loading and unloading parameters such as mooring and berth arrangements, areas for major dry bulk commodities. terminal services, equipment, information exchanges REVIEW OF MARITIME TRANSPORT 2018 77

Table 4.8 Main dry bulk terminals: Estimated country market share in world exports by commodity, 2017 (Percentage) Iron ore Percentage Coal Percentage Grain Percentage Australia 56,2 Australia 30,3 United States 27,7 Cape Lambert Abbott Point Corpus Christi Dampier Dalrymple Bay Galveston Port Hedland Gladstone Hampton Roads Port Latta Hay Point Houston Port Walcott Newcastle New Orleans Yampi Sound Port Kembla Norfolk Portland Brazil 25,8 Indonesia 30,4 Ponta da Madeira Balikpapan European Union 9,8 Ponta do Ubu Banjamarsin Immingham Sepetiba Kota Baru Le Havre Tubarao Pulau Laut Muuga Tanjung Bara Rouen South Africa 4,4 Tarahan Klaipeda Saldanha Bay Riga

Canada 2,8 Russian Federation 11,4 Argentina 10,9 Port Cartier Vostochny Bahia Blanca Seven Islands Murmansk Buenos Aires La Plata Ukraine 0,7 Colombia 7,1 Necochea Yuzhny Cartagena Parana Illichevsk Puerto Bolivar Rosario Puerto Prodeco Sweden 1,5 Santa Marta Australia 9,1 Lulea Brisbane Oxelsund South Africa 6,8 Geraldton Durban Melbourne Chile 1,0 Richards Bay Port Giles Caldera Port Lincoln Calderilla United Statesa 6,9 Sydney Chanaral Baltimore Wallaroo Corpus Christi Iran (Islamic Republic of) 1,3 Long Beach Canada 7,0 Bandar Abbas Los Angeles Halifax Mississippi River System Baie Comeau terminals Mauritania 0,8 Mobile Prince Rupert Nouadhibou Newport News Vancouver Norfolk Peru 1,0 Seward Russian Federation 10,2 San Nicolas Stockton Novorossiysk Rostov Canadab 2,3 Canso Anchorage India 2,0 Neptune Terminal Ukraine 12,6 Mormogao Prince Rupert Odessa Calcutta Roberts Bank Nikolaev Paradip Ilychevsk New Mangalore China 0,3 Chenai Dalian Kakinada Qingdao Qinhuangdao Rizhao

Mozambique 0,4 Maputo Beira

Source: UNCTAD secretariat calculations, based on data from Clarksons Research, 2018. a Excluding exports to Canada. b Excluding exports to the United States. 78 4. PORTS

between ships and terminals, and loading and asset development and mobile workforces), storage unloading cargo handling. By 1 December 2017, 27 (big data analytics, smart metering and single views ports had more than five entries or reports. None of the of stock) and industrial processing (smart grids, smart ports had ratings below average. Scores were based energy management, three-dimensional printing, safety on a weighting system where loading and unloading analytics and predictive maintenance). had the highest value, followed by mooring and berth The maritime transport industry is increasingly playing arrangements, and information exchanges. catch-up when it comes to enhancing the use of innovative The three leading dry bulk terminals according to the technologies to improve systems and processes. One BIMCO vetting scheme were Santander and Bilbao, industry survey reveals that according to 15 per cent Spain and Quebec, Canada. Santander ranked of respondents, autonomous terminal equipment was first in terms of terminal handling of loading and already being used (Vonck, 2017). According to 9 per unloading operations, terminal mooring and berthing cent of the respondents, autonomous drones for port arrangements, and information exchanges between services are being used, while 43 per cent consider this ships and terminals, and terminal equipment. According a short-term trend. Respondents generally agreed that to the 2017 vetting report, over 93 per cent of ports irrespective of the speed at which digitalization unfolds, in the analysis received an average score or better in there is a growing need to upgrade skills and enhance terms of communications between ships and terminals, expertise, efficiency and knowledge. loading and unloading activity, and standards and A review of ports around the world indicates that the maintenance of equipment. Areas requiring further sector has embraced technology to a certain extent, with improvement relate to challenges arising from the need operations of many ports having changed dramatically for language skills, permanent pressure on ship crews over the past few decades. For example, scanning and masters, unexpected claims, and unnecessary technologies are increasingly being used for security and bureaucratic and aggressive port authorities (BIMCO, trade facilitation, while automation is being introduced in 2017). In addition, ports rated poorly when the cost of various container terminals. A focus on container port terminal services was either too high or the service was terminals around the world provides a good overview of non-existent. While the vetting report is useful, there are the actual state of play. Container terminal automation limitations to the system. Additional data and reports – the use of robotized and remotely controlled handling would be required to improve the statistical validity and systems along with the transition from manual to reliability of results obtained. automated processes – is still at relatively early stages of utilization, as 97 per cent of world container port D. DIGITALIZATION IN PORTS terminals are not automated. The share of container terminals that are fully automated is estimated at 1 per A factor that is evolving at an accelerated pace with cent, while semi-automated terminals account for potentially profound implications for port operations 2 per cent thereof (Drewry Maritime Research, 2018b). and management is digitalization. There is no widely Table 4.9 provides an overview of the main terminals accepted definition of the digital economy. The latest where full or partial automation is being implemented or developments in digitalization are emerging from a planned. Fully automated terminals are those where the combination of technologies that are becoming more yard stacking and the horizontal transfer between the pervasive across mechanical systems, communications quay and the yard is automated, while semi-automated and infrastructure (UNCTAD, 2017b). Key technologies terminals are those where only the yard stacking is supporting digitalization in maritime transport include automated. innovations such as the Internet of things, robotics, Container terminals are increasingly using higher levels automation, artificial intelligence, unmanned vehicles of automation to improve productivity and efficiency and equipment, and blockchain (see chapters 1, 2 and secure a competitive advantage. An industry and 5). survey reveals that nearly 75 per cent of terminal The application of such innovations in ports permeates operators consider automation critical in order to all aspects of a port business, including operations, remain competitive in the next three to five years, while planning, design infrastructure development and 65 per cent view automation as an operational safety maintenance. They bring new opportunities for ports by lever (Hellenic Shipping News, 2018). Over 60 per cent unlocking more value that extends beyond traditional of respondent terminal operators expect automation cargo-handling activities. Relevant technologies can to help improve operational control and consistency, help optimize traffic; increase operational efficiency, while 58 per cent expect it to cut overall terminal process transparency and speed; automate processes; operational costs. Respondents were positive about the and reduce inefficiencies and errors. Concrete potential return on investment overall. About one third examples of ways in which the impact of innovative of respondents see in automation a way to increase technologies will likely be felt in ports include changes to productivity by up to 50 per cent, while about one fifth loading and unloading operations (machine-to-machine believe that automation could reduce operational costs communication, platform solutions, robotics, intelligent by more than 50 per cent. REVIEW OF MARITIME TRANSPORT 2018 79

Table 4.9 Overview of automation trends in ports, 2017 Port Terminal Operational level of automation a Container terminals, Fisherman Island Container Brisbane, Australia Semi Terminal Fisherman Island berths 8–10 Fully Melbourne, Australia Victoria International Container Terminal Fully Sydney, Australia Sydney International Container Terminals Semi Brotherson Dock North Fully Antwerp, Belgium Gateway Semi Qingdao, China New Qianwan Fully Shanghai, China Yangshan, phase 4 Fully (trial vessels handled end-2017) Tianjin, China Dong Jiang Not confirmed; in development Fully (phase 1 operational; phases 2 Xiamen, China Ocean Gate Container Terminal b and 3 in development) Hamburg, Germany Altenwerder Container Terminal Fully Burchardkai Semi Vizhinjam, India Adani Not confirmed; in development Surabaya, Indonesia Lamong Bay and Petikemas Semi Dublin, Ireland Ferryport Terminals Semi; planned Vado Ligure, Italy APM Terminals Semi; due to be operational 2018 Nagoya, Japan Tobishima Pier South Side Container Terminal Fully Tokyo, Japan Oi Terminal 5 Semi Lázaro Cárdenas, Mexico Terminal 2 Semi Tuxpan, Mexico Port Terminal Semi Tanger Med, Morocco Tanger Med 2 Not confirmed; due to open 2019 "Delta Dedicated East and West Terminals, Euromax, Rotterdam, Netherlands Fully World Gateway and APM Terminals" Auckland, New Zealand Fergusson Container Terminal Semi; due to be completed 2019 Colón, Panama Manzanillo International Terminal Semi Singapore Pasir Panjang Terminals 1, 2, 3 and 4 Semi Tuas Not confirmed; planned "Pusan Newport International and container terminal, Newport Company, Busan, Republic of Korea Semi Hanjin Newport Company and Hyundai Pusan Newport" Incheon, Republic of Korea Hanjin Incheon Container Terminal Semi Algeciras, Spain Total Terminal Internacional Semi Barcelona, Spain Europe South Semi Semi (terminal 3 operational; terminal 4 Dubai, United Arab Emirates Jebel Ali Terminals 3 and 4 due to be operational 2018) Abu Dhabi, United Arab Emirates Khalifa Container Terminal Semi Liverpool, United Kingdom Liverpool 2 Container Terminal Semi Dubai Ports London Gateway Container Terminal and London, United Kingdom Semi Thamesport Fully (Middle Harbour Redevelopment Long Beach, United States Container Terminal Project in development) Los Angeles, United States TraPac Fully New York, United States Global Container Terminals Semi Norfolk, United States Virginia International Gateway Semi International Terminals Semi; in development Kaohsiung, Taiwan Province of China Terminals 4 and 5 and Kao Ming Container Terminal Semi Taipei, Taiwan Province of China Container Terminal Semi

Source: Drewry Maritime Research, 2018b. a Those not yet fully operational are indicated. b Also known as Yuanhai Automated Container Terminal. Double trolley quay cranes will have significant automation. 80 4. PORTS

However, the advantages of automation in ports should be Dhabi), Boubyan Island (Kuwait) and Sohar Industrial considered within context. In some cases, there can be a Port (Oman), being lined up by the Gulf Cooperation delay in reaching expected productivity levels due to many Council. Large-scale projects for fuel handling are also different innovations coming together without sufficient planned in Saldanha Bay (South Africa) and Mombasa integration, and a lack of overall controllability. While (Kenya), as demand for fuels is set to rise with the technology is a key enabler, it is not the only parameter projected growth of quickly emerging Asian developing influencing terminal productivity (Linked in, 2018). countries (Coherent Market Insights, 2018). Port development and refurbishment projects under the Belt Reported challenges to wider implementation of port and Road Initiative, for example in Pakistan (Gwadar), automation solutions include costs, shortage of skills Djibouti, Myanmar (Kyaukpyu), Greece (Piraeus), and or resources to implement and manage automation, Sri Lanka (Hambantota and Colombo) are contributing concerns of labour unions and time required for to the upgrading and upscaling of port infrastructure implementation. With respect to labour, one study in Africa, Asia and Europe. Chinese investment in focusing on the maritime cluster in the Netherlands container ports is expected to grow as port operators finds that the number of jobs in the maritime cluster in China continue to expand internationally, ultimately will decrease by at least 25 per cent with the advent of surpassing the growth of traditional global operators automation. Jobs in the port sector are projected to drop (Drewry Maritime Research, 2017b). by 8.2 per cent. By comparison, the number of jobs in shipping is expected to fall by 1.8 per cent. The analysis While overall prospects for global port activity remain concludes that the largest subsectors at risk are ports, positive, preliminary figures are pointing to decelerated maritime suppliers and inland navigation (Vonck, 2017). growth in port volumes in 2018. This is a reflection of the waning impetus for growth from, in particular, In sum, a broad range of technologies with applications cyclical recovery and supply chain restocking in 2017. in ports and terminals offers an opportunity for port Furthermore, downside risks weighing on global stakeholders to innovate and generate additional value shipping, including trade policy risks, geopolitical factors in the form of greater efficiency, enhanced productivity, and structural shifts in economies such as China, tend greater safety and heightened environmental protection. to detract from a favourable outlook. An immediate For ports to effectively reap the benefits of digitalization, concern are the trade tensions between China and various concerns will need to be monitored and the United States, the world’s two largest economies, addressed. These include the potential regionalization and the emergence of inward-looking policies and of production and trade patterns associated with protectionism (see chapter 1). robotics and three-dimensional printing, potential labour market disruptions, regulatory changes and the need Today’s overall port-operating landscape is for common standards, in particular when applying characterized by heightened port competition, blockchain technology and data analytics. To do so, especially in containerized trade, where decisions it is essential to improve understanding of issues at by shipping alliances on capacity deployed and the stake, and strengthen partnerships and collaboration structure of ports and networks can determine the mechanisms among all stakeholders – ports, terminal fate of a container port terminal. Additional investment operators, shipping and cargo interests, makers of is required to accommodate larger vessels and larger technology, Governments and investors. volumes handled at peak port calls and will likely weigh on port operators’ margins (Fairplay, 2017b). However, the cost of new investments could be partially mitigated E. OUTLOOK AND POLICY by exploring tailored pricing to align port and terminal CONSIDERATIONS interests with carriers and incentivize shipping lines to work more productively (Port Technology, 2017). In line with projected growth in the world economy, Productive and workable cooperative arrangements international merchandise trade and seaborne between port authorities, terminal operators, shipping shipments (see chapter 1), prospects for global port- lines and the trade community will be essential. handling activity remain positive overall. The outlook on When studying the impact of continued market the supply side is also favourable, as the global port concentration in liner shipping and potential competition infrastructure market is expected to record the highest concerns, competition authorities and maritime gains from 2017 to 2025, primarily owing to increased transport regulators should also analyze the impact of trade volumes and infrastructural development in market concentration and alliance deployment on the emerging developing Asian countries (Coherent Market relationship between ports and carriers. Areas of focus Insights, 2018). include the impact on selection of ports of call, the Energy and container port construction are expected configuration of liner shipping networks, the distribution to attract large demand through the forecast period. of costs and benefits between container shipping Western Asia is projected to remain a key investment and ports, and approaches to container terminal area, with construction projects such as the Fujairah concessions in view of the fact that shipping lines often Oil Terminal, the port and industrial zone of Khalifa (Abu have stakes in terminal operations. REVIEW OF MARITIME TRANSPORT 2018 81

More than ever, ports and terminals around the and other port stakeholders should work together world need to re-evaluate their role in global supply to identify and enable key levers for improving port and logistics chains and prepare to deal with the productivity, profitability and operational efficiencies. changes brought about by the accelerated growth of Governments should ensure that policy and regulatory technological advances with potentially profound impacts frameworks are supportive and flexible. (Brümmerstedt et al., 2017). It is important for ports and Systems that monitor and measure relevant operational, terminals to seek effective ways to embrace the new financial and environmental metrics in ports are strategic- technologies to remain competitive and avoid the risk of planning and decision-making tools that require further marginalization in today’s highly competitive port industry support and development. Greater data availability and (Port Equipment Manufacturers Association, 2018). range enabled by technological advances can be tapped Enhancing port and terminal performance in all market to track, measure and report performance, as well as segments is increasingly recognized as critical for port derive useful insights for port managers, operators, planning, investment and strategic positioning, as regulators, investors and users. Work carried out under well as for meeting globally established sustainability the UNCTAD Port Management Programme on the port benchmarks and objectives such as the Sustainable performance scorecard could be further developed and Development Goals. In this context, the port industry its geographical scope expanded. 82 4. PORTS

REFERENCES

BIMCO (2017). BIMCO’s Dry Bulk Terminals Vetting Report for 2017. Brümmerstedt K, Fiedler R, Flitsch V, Jahn C, Roreger H, Sarpong B, Saxe S and Scharfenberg B (2017). Digitalization of Seaports: Visions of the Future. Fraunhofer. Hamburg. Business Insider Australia (2017). Australia’s Port Hedland shipped close to half a billion tonnes of iron ore last financial year. Money and Markets. 7 July. Clarksons Research (2017). Moving containers globally? Let’s stick together. 25 August. Clarksons Research (2018). Dry Bulk Trade Outlook. Volume 24. No. 5. May. Coherent Market Insights (2018). Port infrastructure market: Global industry insights, trends, outlook, and opportunity analysis, 2016–2024. Press release. Drewry Maritime Research (2018a). Container Forecaster. Quarterly. First quarter. Drewry Maritime Research (2018b). Ports and terminal insight. Quarterly. First quarter. Drewry Maritime Research (2017a). Container Forecaster. Quarterly. Fourth quarter. Drewry Maritime Research (2017b). Ports and terminal insight. Quarterly. Fourth quarter. Fairplay (2017a). Tonnage titans – top 20 ports by annual cargo throughput. 15 October. Fairplay (2017b). 2017 in review: Port call sizes continue to rise. 15 December. Fairplay (2018). Improved liner efficiency leaves ports struggling. 3 May. Hellenic Shipping News (2018). Majority of Navis customers surveyed exploring some level of automation to stay competitive in ocean shipping industry. 15 March. JOC.com (2018). Global port berth productivity falls as call size continued to grow. 3 May. Market Realist (2018). What record iron ore shipments from Port Hedland mean for prices. 29 January. Linked in (2018). Container terminal automation: What does the future really hold? 31 May. Marine Traffic (2018). Available at www.marinetraffic.com. Notteboom TE, Parola F, Satta G and Pallis AA (2017). The relationship between port choice and terminal involvement of alliance members in container shipping. Journal of Transport Geography. 64:158–173. Port Equipment Manufacturers Association (2018). Digitalization signals “fourth industrial revolution” for global ports sector. 19 February. Port Technology (2017). McKinsey report: Vessels to reach 50,000 TEU by 2067. 30 October. Shanghai International Shipping Institute (2016). Global port development. Shanghai International Shipping Institute (2017). Global port development. UNCTAD (2016). Port Performance: Linking Performance Indicators to Strategic Objectives. UNCTAD Train for Trade Port Management Series. Volume 4. UNCTAD (2017a). Port Performance Scorecard Newsletter. Issue 1. https://tft.unctad.org/wp-content/ uploads/2017/08/2017-Newsletter-PPS-June-FINAL.pdf. UNCTAD (2017b). Information Economy Report 2007: Digitalization, Trade and Development (United Nations publication, Sales No. E.17.II.D.8, New York and Geneva). Vonck I (2017). Ports of the future: A vision. Deloitte Port Services. Baltic Ports Conference 2017. Wei Z (2018). Cosco’s presence in Zeebruge fortifies its European Belt and Road. Shipping and Finance. February. Issue 260, p. 6.